Business groups apprehensive about tax reform, part 2

At least two business groups on Wednesday expressed concerns about the Duterte administration’s second package of Tax Reform for Acceleration and Inclusion (TRAIN).

During a hearing at the House of Representatives, the American Chamber of Commerce of the Philippines (AmCham) expressed apprehensions about the planned reforms under TRAIN 2, particularly the “slow” reduction of corporate income tax.

“Our position is that we find it too slow, too little, too uncertain,” Jules Riego, chairperson of the AmCham Committee on Financial Services and Taxes and Tariffs, told lawmakers.

The proposed second package of tax reforms submitted by the Department of Finance (DOF) to Congress in January seeks to lower corporate income tax rates from 30 percent.

But the pace of reduction would happen by 1 percentage point a year until it reaches 25 percent.

“Out of the 11 members of the ASEAN (Association of Southeast Asian Nations), we’re actually the highest,” said Riego.

“Even if we drastically reduce to ... 25 percent, we’re still higher than the average,” he said, noting that the ASEAN has an average of 22.5 percent.

Meanwhile, the Makati Business Club (MBC) is concerned about the possible amendments to fiscal incentives.

“Give present investors more time before you just take it away,” Coco Alcuaz, executive director at MBC, said during the hearing.

The DOF proposes to amend or repeal at least 123 special laws on investment incentives, and consolidate what would remain into a single omnibus incentive code.

At the same hearing, the IT and Business Process Association of the Philippines (IBPAP) called on government to give the industry a 10-year transition period.

“That’s the neighborhood of what we’re thinking about,” Alcuaz said. —VDS, GMA News